Visaka Industries: Poor Q1 FY 2011 results but holds promise!

Though Visaka Industries reported poor Q1 FY 2011 results, it holds out promise owing to its consistent growth rate, high book value, low PE, good dividend yield and a growing demand for its products amongst the rural and semi-urban masses

Visaka Industries Q1 FY 2011 results were quite poor. Visaka Industries‘ YOY sales were down to Rs. 185 cr from Rs. 189 crores. Visaka Industries‘ EDITA was down to Rs. 32.35 cr from Rs. 39.34 cr while the Net Profit after tax was down to Rs. 20.70 cr from Rs. 25.84 cr. Visaka Industries‘ Diluted EPS was down to Rs. 13.03 from Rs. 16.28.

The First Quarter is supposed to the best Q for companies like Hyderabad Industries & Visaka Industries. So, a subdued FY 2011 is on the cards for Hyderabad & Visaka.

Notwithstanding the poor Q1 results, Visaka Industries holds out a lot of promise for the patient investor.

Visaka Industries has grown steadily at a 3 year CAGR sales of 13%. Visaka Industries‘ 3 year CAGR Profit grew at 35%. Visaka Industries has a manageable Debt to Equity Ratio of 0.78 and offers a Return on Equity of 27%.

Particulars

Quarter Ended

Jun. 2010

Jun. 2009

% Var.

Sales

185.97

189.00

-2

OPM %

19.58

23.65

-17

PBDT

35.34

43.88

-19

PBT

31.28

38.53

-19

NP

20.70

25.86

-20

Visaka Industries‘ Book Value of Rs. 148 and low PE of 4.5 offers comfort in valuations.

Also at the CMP of Rs. 156, Visaka Industries‘ dividend yield is an attractive 3.1%.

Visaka Industries is also in a market with huge growing demand from the rural and semi-urban markets for cement and asbestos sheets.

About Visaka Industries:

VISAKA INDUSTRIES’ KEY RATIOS

Q on Q Sales Growth (%)

: 9.48

Q on Q Net Profit Growth (%)

: 42.27

3 Yr CAGR Sales (%)

: 12.75

3 Yr CAGR Profit (%)

: 35.02

Debt to Equity Ratio (x)

: 0.78

Net Profit Margin (%)

: 9.56

Return on Equity (%)

: 27.02

EV to EBITDA (x)

: 2.95

Visaka Industries was established in 1981. Visaka Industries is the second largest cement sheet manufacturer in India with the total installed capacity of 6,30,000 tonnes (the first is Everest Industries). Visaka Industries is diversified and also engaged in the manufacture of fibre cement products and synthetic blended yarn. Visaka Industries has a presence across India with 6 manufacturing plant for asbestos making plants and two for manufacturing garments. (See Also Hyderabad Industries – Roofing Profits & Everest Industries – Building Profits)

Good evening Everyone. I am holding following stocks now in my portfolio. Kindly suggest which to continue for long term and which to exit. Also suggest which new stock to add . Kindly advise which existing stock to accumulate more now. Thank you. 1.ITC 2. FUTURE RETAIL 3 FUTURE CONSUMER 4 FUTURE LIFE STYLE 5 […]

Disclaimer: This is a Fan Site in Rakesh Jhunjhunwala's name. Rakesh Jhunjhunwala is not associated with us and is in no way aware, accountable or responsible for what is stated here. Further, nothing here constiutes investment advice for you to act on. Also, we have a vested interest, and are extremely biased, in everything that we say. So Mind It!